NEXT Venture Pitch 2019 – A Recap

By April 23, 2019 May 2nd, 2019 Events, Local News, Videos
Written by: Daniel Natal

On Thursday, April 11th, NEXT hosted a symposium in downtown Greenville called “Venture Pitch”.

In it, a host of experts were brought together with entrepreneurs to discuss the importance of venture capital in any economic ecosystem. In addition (in the latter half of the event), select local businesses were given the opportunity to pitch their businesses to real venture capitalists.

Ruchir Sharma, in his book “Breakout Nations,” asserts that places like the United States are positioned to do much better, with their economy not based on the vagaries of demographics, but on the bedrock of innovation. He comments: “The broader ecosystem that nurtures tech startups, including the venture capital industry, the top-notch university system, and the strong legal protection for intellectual property, is also arguably stronger in the United States than anywhere else in the world, certainly more so than in China or Japan. While venture capital still barely exists in big emerging markets, according to a 2011 research report by the brokerage firm CLSA, in the United States, venture capital-backed companies accounted for 11 percent of U.S. private-sector jobs in 2010, up from 8 percent before the crisis of 2008.”

So, clearly, the synergy created by cutting-edge entrepreneurs, married to forward-thinking venture capitalists, is America’s “ace up its sleeve”. And nowhere is this understood more so than in Greenville, where “Venture Pitch” was held. Proceedings were inaugurated with a CEO workshop. It was presided over by two attorneys from the firm of Morris, Manning and Martin, LLP. The room, at the Greenville One Center, was packed to capacity as entrepreneurs listened to John Yates and Larkin Ellzey. Yates, a pioneer in technology law gave a dynamic presentation on what investors were looking for in a business. His colleague, Larkin Ellzey, advised the assembly on common pitfalls that present themselves to entrepreneurs, as well as practical pointers on how to maximize your company’s valuation.

Yates and Ellzey discussed their recommended Ten Key Steps for Raising Venture Capital:

  • Construct a timeline for growth.

  • Formulate an exit strategy for sale.

  • Find the right angel and venture investor that fits your culture.

  • How to keep equity records and capitalization records.

  • The importance of sales forecasting and how it factors into valuation.

  • Differences between East Coast and West Coast (in terms of deals)

  • How to make your company attractive to strategic investors.

  • What private equity firms look for in acquiring tech companies.

  • Secrets to selecting the best advisory board and management colleagues.

  • How to avoid the biggest legal problems that impair your ability to complete a successful financing or sale.

After the CEO workshop drew to a successful conclusion, the second phase of “Venture Pitch” began.

As the saying goes, “Nothing ventured, nothing gained”. And that was the theme of NEXT’s “Venture Pitch” event, in which venture capitals held forth about their ideas to entrepreneurs and innovators.

Rob Bearden, the founder of Hortonworks, was on hand to say, “Fear only exists in your head. It doesn’t exist. You have to remember that. You can’t let inertia hold you back.” He wanted to stress the importance of courage, imagination, and fortitude as methods to achieve self-actualization as a business person.

The validity of that assertion isn’t just true in the microcosm; it also holds true in the macrocosm. That is to say, the larger economy has benefited enormously from venture capitalists who have helped entrepreneurs create profitable companies.

According to a recent Stanford study, a fifth of current U.S. companies, from Google to Intel to FedEx, have received venture capital financing. The men behind the study, Ilya Strebulaev and Will Gornall, say, “Over the past 20 years these companies have been a prime driver of both economic growth and private sector employment.”

This reality was the impetus behind Venture Pitch, which sought to drive home the fact that, in a changing and oftentimes turbulent global economy, it is critical for South Carolina to nurture and encourage entrepreneurialism and innovation. In that spirit, Matt Dunbar, the managing director of Venturesouth, introduced various companies to the venture capitalists in the crowd, so that they could give a pitch. The audience in attendance (venture capitalists, aspiring entrepreneurs and laymen alike) watched as a succession of pitches took place.

The companies who gave their four-minute presentations were:

  1. Earnnest – Take a look at their Pitch HERE

  2. Omedym – Take a look at their Pitch HERE

  3. The Write Way – Take a look at their Pitch HERE

  4. SpeakPoint – Take a look at their Pitch HERE

  5. MailProtector – Take a look at their Pitch HERE

  6. Heatworks – Take a look at their Pitch HERE

  7. MeritEHS – Take a look at their Pitch HERE

  8. Offsite – Take a look at their Pitch HERE

From real estate software [Earnnest] to cursive-writing robots [The Write Way] to revolutionary new waterheaters designed to use the minerals in the water as a heating element [Heatworks], attendees got to see just how complex the South Carolina economy was becoming.

According to economist Ricardo Hausmann of Harvard, the amount of business diversity in a region is key to upward economic mobility. Alec Ross, author of “Industries of the Future,” concurs with this, adding, “Economic diversity is key. The same thing applies to today’s investors if they want to be part of the trillions of dollars of wealth creation that will come from the industries of the future.”

And some of those potential investors (i.e., venture capitalists) were on hand, regaling the audience with fascinating experiences and giving entrepreneurs tips on how to make their companies more attractive to VC’s.

One persistent theme was people. Ryan Ziegler, of venture capitalist group Edison Partners, said, “We look for coachability. If the person has all the answers, it usually ends in disaster.”

Another theme was decentralization, and the ability to make it in the Southeast now that technology has rendered location almost irrelevant (which the aforementioned Rob Bearden provided an example for when he made millions from creating his business in Madison, Georgia).

Upon that theme, Rob Ziegler added, “Private-equity overhang exists more now than at any time in history. So that’s good news for entrepreneurs here.”

Thiago Olson, of Engage Ventures, concurred saying that venture capital groups had an advantage in looking for portfolio companies outside of Silicon Valley insofar as talent retention was easier. In larger so-called Alpha Cities, they have nomadic populations. In smaller enclaves, like Greenville, South Carolina, by contrast, “people have roots,” he said. “In secondary or tertiary cities, people are tied to their communities, to their families. So it’s optimal to build a core team in such a place.”

And the theme of team building was reinforced by a panel, facilitated by Joe Schmidt, (and included sports legends Lloyd Carr, Levon Kirkland, and John Harkes) that drew comparisons between sports teams and corporate teams that led their companies to victory.

In all, Venture Pitch was an inspiring success, that offered a window onto local businesses, but, more importantly, a window onto the future.

 

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